No matter how much money you make, taking care of a parent while planning for your own retirement can be a challenge. Jim Nishida-Adams, a communications specialist from San Francisco, California, e-mailed us asking for some help in figuring out how he and his wife could swing it.

With a combined income of $60,000, moderate debt, student loans, and about $10,000 in the bank earning low interest, Jim wants to contribute several hundred dollars to his mother each month. A widow with no savings, she will soon retire and face a heavy drop in income. Additionally, Jim wants to buy a new home, continue to invest for his retirement -- he currently contributes about 10% of his income to his company's 401k -- and support his wife while she goes back to school for additional training.

To get Jim some top-notch advice, we hooked him up with Gary Schatsky, a financial planner, attorney, and President of ObjectiveAdvice.com. Gary analyzed the situation and came up with some suggestions that gave Jim a new perspective. "He's got $18,000 of student loans paying 9% (interest). Meanwhile, he's got $10,000 (of savings) earning 2%," Gary summarized. "All he has to do is pre-pay some of the student loan. He absorbs no additional risk, and he saves a very significant amount of money. This is true whether you have student loans, credit card debts, or an auto loan. Don't only look at investments as an opportunity to help you financially. Sometimes, managing your debt can save you more than investments."

Gary also suggested that Jim defer buying a new home because he doesn't have a large enough down-payment to really make it worthwhile. Banks require that homebuyers with less than a 20% down-payment purchase Private Mortgage Insurance (P.M.I.), which guarantees that the mortgage will be paid even if the homebuyer defaults. This insurance is quite expensive and, coupled with the monthly mortgage payments, puts a new home out of reach for the short term. Gary also recommended that potential homebuyers in big cities with expensive property rates seriously consider whether it might be in their best interests to continue renting rather than tie up all their money in a home.

On a positive note, Gary's analysis revealed that Jim will, in fact, be able to help his mother each month. Additionally, when Jim's wife finishes school, the family's combined income will rise substantially, allowing the couple to begin stashing retirement and down-payment money at a faster rate. By paying down the student loan, Jim will save even more money and lower his liabilities. All in all, the future offers promise for jim and his family.

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